The Launch Services Market Provides Great Theater

While watching the events unfoldof SpaceX’s recent launch of the Dragon spacecraft, it occurred to me just how dramatic the satellite industry can be. The mission, which was aborted in the last second and then successfully launched three days later, was undoubtedly a key milestone for the company. Gwynne Shotwell, SpaceX’s president, showed a very human element of our industry when she told me the event was one of indescribable joy for her.

I have been to two launches myself, and it is amazing how you get caught up in the tension of it all. For me, the launch of Avanti’s Hylas-1 really stuck out. The launch of their first satellite was such a huge deal for the company and emotions ran high. The sense of relief was palpable when the satellite started making its way to space. I can imagine there were similar feelings at the SpaceX launch.

The launchers market is a remarkable one on a number of levels. The launches themselves not only have a sense of drama, but also serve as a reminder, if any were needed, of the technological brilliance that is often apparent in our industry. Competition between launch providers is ferocious, as displayed on the stages of launch panels we’ve hosted at recent SATELLITE shows. Executives in this sector are known for being outspoken and, at times, for being quick to throw off their gloves. This panel itself has emerged as one of the highlights of recent SATELLITE shows, and I think there is a real passion portrayed, which the audience, and dare I say it, even the speakers enjoy. It has certainly been pretty compelling viewing over the last couple of years.

SpaceX’s entry into the market has shaken things up considerably and when you add Sea Launch’s return from bankruptcy and the possibility that China might get a greater slice of the pie, you will notice a much more multi-layered market than in the past. But can they all survive? The market has been pretty stable for a number of years, but sooner or later, it will enter a down period — as is the law of business. How the market will ultimately shake out is one of the most intriguing questions in our sector, but there appears to be plenty of business to go around at the moment.

Arianespace and ILS have traditionally been the heavyweights in this sector, but if SpaceX can build on its success so far, the market could be in for some irrevocable changes in the future. Price competition between launchers is already heating up. Martin Halliwell, CTO, SES, told us the initial contract SES signed with SpaceX offered the operator a huge discount for a first launch compared to alternatives. Many operators like SES have already decided to sign with SpaceX knowing it has not yet built a strong reputation as a commercial provider. The market can be polarizing in that sense, with many CEOs noting that they cannot take the risk without flight proven technology. But as you will see, Satmex, a company that has emerged from financial troubles in recent years, is a big believer in taking calculated risks and has no problems going with SpaceX and Boeing for an intriguing combination of an electric satellite with a new launch vehicle.

The debate that surrounds the launch market’s dynamics will continue to be exciting, as contracts are fought for more keenly than ever. It is great theater for people like me standing on the sidelines watching these events and launches — perhaps the best theater in the satellite industry right now. And let’s be honest, we all like a bit of drama, don’t we?

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